Thursday, 22 August 2013

Facebook creates Internet.org alliance to reduce price of mobile data plans to 1% of current price

Facebook creates Internet.org alliance to reduce price of
mobile data plans to 1% of current price

In one of the most admirable but least altruistic moves
ever, Facebook CEO Mark Zuckerberg is heading up Internet.org, a new global
partnership that aims to bring down the cost of mobile internet access, and to
connect the roughly four billion inhabitants of Earth who still don’t have
access to the internet. The primary goal, of course, is to ensure a steady
stream of new customers — and thus an increases in stock market valuation — for
the members of the Internet.org alliance, which includes Qualcomm, Samsung, and
Nokia, among others. We shouldn’t ignore the huge range of benefits that
internet access can bestow on under-connected communities, though: From access
to news and educational materials, to communicating with distant friends and
family, internet access can be life-changing.

Here in the developed world, internet-oriented companies
such as Facebook are facing an interesting problem: Market saturation. Whether
it’s via wireline services (Cable, DSL) or wireless (smartphones, tablets),
almost the entirety of the US, Europe, and the rest of the developed world is connected to the internet — and most of
them use Facebook on a scarily regular basis. As of June 2013, Facebook had
1.15 billion monthly users, with 699 million of those using the service on a
daily basis. Those are some truly awesome figures, and you’d think that
Facebook and its share holders would be happy, but the sad truth is that
Facebook has grown too big too quickly. With 1.15 billion users, and only 2.4
billion people connected to the internet — many of which use social networks
that are popular in their own country, such as Vkontakte in Russia and Renren
in China — Facebook is quickly approaching saturation point.

When Facebook saturates the market, its user growth will
slow to a crawl, and its revenue growth will eventually follow suit. For
Facebook itself, this isn’t such a huge problem — but for the stock market,
which only really cares about growth and growth potential, this is a Bad Thing.
And Facebook is just one example: There are a lot of internet-oriented
companies, such as Amazon or Google, that are growth-capped by the number of
internet users.

The answer, as far as Mark Zuckerberg is concerned, is to
connect more people to the internet. To do this, Facebook seems to have
corralled half a dozen of the world’s tech and telecoms giants, including
Qualcomm, Samsung, Nokia, Ericsson, MediaTek, and Opera, into a coalition and
called it Internet.org. The end goal is to get most of the world connected to
the internet, and judging by the companies involved, the coalition’s
effortswill be almost entirely wireless- and mobile-oriented. This makes a lot
of sense, as there are almost seven billion devices connected to cellular
networks worldwide (almost one cellular device per person), but still
relatively few that are connected to the internet.

To spur internet usage and connectivity in under-connected
regions, the group’s first goal is to cut the cost of mobile internet access to
just 1% of its current cost within five to 10 years. This, combined with
efforts to reduce the price of dumbphones and smartphones, plus working with
carriers to offer free access to services such as Facebook, Twitter, and
Google, should work wonders. (See: The dumbphone strikes back.) The New York
Times cites Philippines carrier Globe Telecom as a good example of this
approach, which has gone from 0% of its 37 million users subscribing to a
mobile data plan, to 20% in just two years by offering free access to certain
online services. There are lots of small changes, such as reducing power
consumption (and thus increasing battery life), reducing the amount of internet
traffic required by certain apps, and reducing the cost of infrastructure, that
would make internet access in the developing world a much more feasible
proposition.

Moving
forward, there are scant few who would denounce such noble efforts to bring
internet access to the under-connected — but at the same time, it’s important
to keep everything in perspective. As Bill Gates succinctly put it, ”When a kid
gets diarrhea, no, there’s no Web site that relieves that.” Internet.org also
doesn’t appear to be interested in the long-haul backbone links between the
developed and developing worlds, instead focusing on local infrastructure — not
a deal-breaking flaw, but definitely not ideal. One of the key reasons that the
developing world is taking so long to come online is due to its cripplingly
slow links to the Internet Prime; after all, what good is DSL or a mobile
to of �
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to services such as Facebook, Twitter, and
Google, should work wonders. (See: The dumbphone strikes back.) The New York
Times cites Philippines carrier Globe Telecom as a good example of this
approach, which has gone from 0% of its 37 million users subscribing to a
mobile data plan, to 20% in just two years by offering free access to certain
online services. There are lots of small changes, such as reducing power
consumption (and thus increasing battery life), reducing the amount of internet
traffic required by certain apps, and reducing the cost of infrastructure, that
would make internet access in the developing world a much more feasible
proposition.